How do I report pension income paid for restitution?

[sazsag]

My sister signed her pension over towards her federal restitution.  How do I reflect that on her taxes?

[MaryK1 · Accepted solution]

She should receive a 1099-R for the pension which is reported as income.  There are no tax deductions for federal restitution.

[sazsag]

She did receive a 1099-R and taxes were taken out.  Is there an exemption for early withdrawal to pay this?

[MaryK1]

Yes, unfortunately, she will probably have to pay the penalty because it does not fit into an exception.  Was she forced to get the money from the pension?

[sazsag]

It was her decision to take her pension and apply it towards the restitution.